* Operating profit per shr $0.29 vs $0.22 estimate
* Says conditions remain challenging
* Shares up 1.4 pct premarket (Adds details on sales, finance unit, CEO quote)
CHICAGO, April 20 (Reuters) - U.S. motorcycle maker Harley Davidson Inc (HOG.N) reported stronger-than-expected quarterly results on Tuesday, helped in part by a rebound at its in-house finance unit, but warned that it sees the market staying challenging throughout the year.
The company, whose shares rose 1.5 percent in premarket trading, reported a first-quarter net profit of $35.4 million, or 14 cents a share, down from $117 million, or 50 cents a share, a year before.
Revenue excluding financial services fell 18 percent to $1.04 billion.
But stripping out restructuring costs and other one-time items, Harley reported a profit from continuing operations of 29 cents a share.
On that basis, analysts, on average, had expected the Milwaukee-based company to report a net profit of 22 cents a share, according to Thomson Reuters I/B/E/S.
Its shares rose 48 cents to $33.25 in premarket trading.
The results included $26.7 million in operating income from Harley's in-house finance unit, which snapped a three-quarter streak of losses thanks to the improved performance of its retail motorcycle loan portfolio and by a lower cost of funds.
Worldwide retail sales of new Harley-Davidson motorcycles declined 18.2 percent in the first quarter, a smaller rate of decline than in the prior three quarters.
The brightest spot was international retail sales, which fell just 2.8 percent during the quarter after posting double-digit declines for a year. Sales in Europe and Canada were both up slightly during the quarter.
"We are seeing directional improvement in our dealers' retail motorcycle sales as we enter the key selling season," Keith Wandell, the company's president and chief executive said in a statement.
"At the same time, given the global economic uncertainty that still exists, we believe conditions will remain challenging throughout this year, and we will continue to factor that into how we manage the business."
Revenue from sales of Harley-Davidson motorcycles was down 20 percent during the quarter to $808.8 million.
Parts and accessories sales fell 12 percent to $149.1 million and general merchandise sales, which includes Harley-branded apparel, fell 12 percent to $66.3 million. (Reporting by James B. Kelleher; Editing by Derek Caney and Gerald E. McCormick)